2018 Q1 Form 10-Q Financial Statement

#000104289318000007 Filed on April 26, 2018

View on sec.gov

Income Statement

Concept 2018 Q1 2017 Q4 2017 Q1
Revenue $99.17M $108.0M $119.2M
YoY Change -16.82% 1.77% -28.42%
Cost Of Revenue $73.49M $72.36M $82.44M
YoY Change -10.86% -6.99% -11.45%
Gross Profit $25.69M $35.62M $36.79M
YoY Change -30.17% 25.87% -49.92%
Gross Profit Margin 25.9% 32.99% 30.86%
Selling, General & Admin $27.55M $31.10M $25.81M
YoY Change 6.74% 43.32% 95.2%
% of Gross Profit 107.24% 87.32% 70.15%
Research & Development $9.400M $9.600M $11.90M
YoY Change -21.01% -15.04% 9.17%
% of Gross Profit 36.59% 26.95% 32.35%
Depreciation & Amortization $8.241M $8.800M $9.832M
YoY Change -16.18% 0.0% 26.46%
% of Gross Profit 32.08% 24.71% 26.73%
Operating Expenses $27.55M $40.70M $25.81M
YoY Change 6.74% 23.71% 95.2%
Operating Profit -$6.277M -$5.107M -$870.0K
YoY Change 621.49% 10.21% -101.76%
Interest Expense $2.000K $600.0K $15.00K
YoY Change -86.67% -45.45% 275.0%
% of Operating Profit
Other Income/Expense, Net
YoY Change
Pretax Income -$4.482M -$4.500M $52.00K
YoY Change -8719.23% 25.0% -99.9%
Income Tax $2.901M $400.0K -$42.00K
% Of Pretax Income -80.77%
Net Earnings -$7.383M -$71.49M $94.00K
YoY Change -7954.26% -5590.63% -99.74%
Net Earnings / Revenue -7.44% -66.21% 0.08%
Basic Earnings Per Share -$0.20 $0.03 $0.00
Diluted Earnings Per Share -$0.20 $0.03 $0.00
COMMON SHARES
Basic Shares Outstanding 37.73M 37.86M shares 37.53M shares
Diluted Shares Outstanding 37.73M 37.69M shares

Balance Sheet

Concept 2018 Q1 2017 Q4 2017 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $495.6M $493.2M $414.2M
YoY Change 19.65% 16.46% -2.17%
Cash & Equivalents $495.6M $493.2M $414.2M
Short-Term Investments
Other Short-Term Assets $36.62M $32.65M $37.81M
YoY Change -3.14% -17.94% -16.33%
Inventory $276.0M $291.1M $346.7M
Prepaid Expenses
Receivables $193.9M $191.6M $208.5M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $1.002B $1.009B $1.007B
YoY Change -0.51% -4.56% -13.51%
LONG-TERM ASSETS
Property, Plant & Equipment $288.5M $284.2M $320.0M
YoY Change -9.85% -12.04% 8.49%
Goodwill $47.82M $47.62M $46.51M
YoY Change 2.8% 38.56%
Intangibles $46.31M $46.82M $48.25M
YoY Change -4.03% 23.19%
Long-Term Investments
YoY Change
Other Assets $16.08M $15.61M $16.79M
YoY Change -4.19% -1.68% 54.0%
Total Long-Term Assets $395.7M $391.3M $446.3M
YoY Change -11.32% -3.32% 45.91%
TOTAL ASSETS
Total Short-Term Assets $1.002B $1.009B $1.007B
Total Long-Term Assets $395.7M $391.3M $446.3M
Total Assets $1.398B $1.400B $1.453B
YoY Change -3.83% -4.22% -1.15%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $25.28M $33.48M $25.70M
YoY Change -1.63% -7.28% -23.32%
Accrued Expenses $28.50M $37.00M $28.90M
YoY Change -1.38% 28.03% -5.86%
Deferred Revenue $4.767M
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $87.24M $99.91M $83.19M
YoY Change 4.86% -1.55% -20.69%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $0.00 $0.00
YoY Change
Other Long-Term Liabilities $2.001M $2.001M
YoY Change
Total Long-Term Liabilities $2.001M $2.001M $0.00
YoY Change
TOTAL LIABILITIES
Total Short-Term Liabilities $87.24M $99.91M $83.19M
Total Long-Term Liabilities $2.001M $2.001M $0.00
Total Liabilities $92.75M $105.3M $85.49M
YoY Change 8.49% 0.35% -20.22%
SHAREHOLDERS EQUITY
Retained Earnings $1.394B $1.400B $1.501B
YoY Change -7.14% -6.71% 2.67%
Common Stock $24.35M $20.46M $9.462M
YoY Change 157.29% 250.08% 154.9%
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00
YoY Change
Treasury Stock Shares
Shareholders Equity $1.305B $1.294B $1.368B
YoY Change
Total Liabilities & Shareholders Equity $1.398B $1.400B $1.453B
YoY Change -3.83% -4.22% -1.15%

Cashflow Statement

Concept 2018 Q1 2017 Q4 2017 Q1
OPERATING ACTIVITIES
Net Income -$7.383M -$71.49M $94.00K
YoY Change -7954.26% -5590.63% -99.74%
Depreciation, Depletion And Amortization $8.241M $8.800M $9.832M
YoY Change -16.18% 0.0% 26.46%
Cash From Operating Activities $11.39M $33.30M $11.48M
YoY Change -0.77% 33.2% -78.15%
INVESTING ACTIVITIES
Capital Expenditures $10.57M -$8.000M $4.847M
YoY Change 118.09% 45.45% -37.31%
Acquisitions $0.00 $19.87M
YoY Change -100.0%
Other Investing Activities $100.0K $2.800M -$19.40M
YoY Change -100.52% -102.11% -19500.0%
Cash From Investing Activities -$10.50M -$5.200M -$24.28M
YoY Change -56.75% -96.23% 217.1%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net $0.00 $0.00
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 52.00K 100.0K $403.0K
YoY Change -87.1% -92.31% 142.77%
NET CHANGE
Cash From Operating Activities 11.39M 33.30M $11.48M
Cash From Investing Activities -10.50M -5.200M -$24.28M
Cash From Financing Activities 52.00K 100.0K $403.0K
Net Change In Cash 940.0K 28.20M -$12.40M
YoY Change -107.58% -125.29% -127.53%
FREE CASH FLOW
Cash From Operating Activities $11.39M $33.30M $11.48M
Capital Expenditures $10.57M -$8.000M $4.847M
Free Cash Flow $817.0K $41.30M $6.629M
YoY Change -87.68% 35.41% -85.2%

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CY2017Q1 us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
4847000 USD
CY2018Q1 us-gaap Payments To Acquire Property Plant And Equipment
PaymentsToAcquirePropertyPlantAndEquipment
10571000 USD
CY2017Q4 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.01
CY2018Q1 us-gaap Preferred Stock Par Or Stated Value Per Share
PreferredStockParOrStatedValuePerShare
0.01
CY2017Q4 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
10000000 shares
CY2018Q1 us-gaap Preferred Stock Shares Authorized
PreferredStockSharesAuthorized
10000000 shares
CY2017Q4 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2018Q1 us-gaap Preferred Stock Shares Issued
PreferredStockSharesIssued
0 shares
CY2017Q4 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2018Q1 us-gaap Preferred Stock Value
PreferredStockValue
0 USD
CY2017Q1 us-gaap Proceeds From Sale Of Machinery And Equipment
ProceedsFromSaleOfMachineryAndEquipment
439000 USD
CY2018Q1 us-gaap Proceeds From Sale Of Machinery And Equipment
ProceedsFromSaleOfMachineryAndEquipment
71000 USD
CY2017Q1 us-gaap Proceeds From Stock Options Exercised
ProceedsFromStockOptionsExercised
403000 USD
CY2018Q1 us-gaap Proceeds From Stock Options Exercised
ProceedsFromStockOptionsExercised
52000 USD
CY2017Q4 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
284247000 USD
CY2018Q1 us-gaap Property Plant And Equipment Net
PropertyPlantAndEquipmentNet
288466000 USD
CY2017Q4 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
1400296000 USD
CY2018Q1 us-gaap Retained Earnings Accumulated Deficit
RetainedEarningsAccumulatedDeficit
1393933000 USD
CY2018Q1 us-gaap Revenue From Contract With Customer Excluding Assessed Tax
RevenueFromContractWithCustomerExcludingAssessedTax
88506000 USD
CY2018Q1 us-gaap Revenue Remaining Performance Obligation
RevenueRemainingPerformanceObligation
27200000 USD
CY2017Q1 us-gaap Revenues
Revenues
119228000 USD
CY2018Q1 us-gaap Revenues
Revenues
99173000 USD
CY2017Q1 us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
91592000 USD
CY2018Q1 us-gaap Sales Revenue Goods Net
SalesRevenueGoodsNet
71045000 USD
CY2017Q1 us-gaap Sales Revenue Services Net
SalesRevenueServicesNet
27636000 USD
CY2018Q1 us-gaap Sales Revenue Services Net
SalesRevenueServicesNet
28128000 USD
CY2017Q1 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
25808000 USD
CY2018Q1 us-gaap Selling General And Administrative Expense
SellingGeneralAndAdministrativeExpense
28253000 USD
CY2017Q1 us-gaap Share Based Compensation
ShareBasedCompensation
3216000 USD
CY2018Q1 us-gaap Share Based Compensation
ShareBasedCompensation
3974000 USD
CY2017Q4 us-gaap Stockholders Equity
StockholdersEquity
1294461000 USD
CY2018Q1 us-gaap Stockholders Equity
StockholdersEquity
1305109000 USD
CY2017Q4 us-gaap Unbilled Receivables Not Billable At Balance Sheet Date Amount Expected To Be Collected Within One Year
UnbilledReceivablesNotBillableAtBalanceSheetDateAmountExpectedToBeCollectedWithinOneYear
41000000 USD
CY2018Q1 us-gaap Unbilled Receivables Not Billable At Balance Sheet Date Amount Expected To Be Collected Within One Year
UnbilledReceivablesNotBillableAtBalanceSheetDateAmountExpectedToBeCollectedWithinOneYear
45700000 USD
CY2017Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
168000 shares
CY2018Q1 us-gaap Weighted Average Number Diluted Shares Outstanding Adjustment
WeightedAverageNumberDilutedSharesOutstandingAdjustment
0 shares
CY2017Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
37693000 shares
CY2018Q1 us-gaap Weighted Average Number Of Diluted Shares Outstanding
WeightedAverageNumberOfDilutedSharesOutstanding
37729000 shares
CY2017Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
37525000 shares
CY2018Q1 us-gaap Weighted Average Number Of Shares Outstanding Basic
WeightedAverageNumberOfSharesOutstandingBasic
37729000 shares
CY2018Q1 us-gaap Revenue Recognition Leases
RevenueRecognitionLeases
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Lease revenues</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-align:left;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company earns lease revenues from the rental of running tools. Rental revenues are recognized within service revenues on a dayrate basis over the lease term.</font></div></div>
CY2018Q1 us-gaap Revenue Recognition Percentage Of Completion Method
RevenueRecognitionPercentageOfCompletionMethod
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenues recognized under the over time method</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company uses the over time method on long-term project contracts that have the following characteristics:</font></div><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">the contracts call for products which are designed to customer specifications;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">the structural designs are unique and require significant engineering and manufacturing efforts generally requiring more than one year in duration;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">the contracts contain specific terms as to milestones, progress billings and delivery dates;</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">product requirements cannot be filled directly from the Company&#8217;s standard inventory; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has an enforceable right to payment for any work completed to date and the enforceable payment includes a reasonable profit margin.</font></div></td></tr></table><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">For each project, the Company prepares a detailed analysis of estimated costs, profit margin, completion date and risk factors which include availability of material, production efficiencies and other factors that may impact the project. On a quarterly basis, management reviews the progress of each project, which may result in revisions of previous estimates, including revenue recognition. The Company calculates the percentage complete and applies the percentage to determine the revenues earned and the appropriate portion of total estimated costs to be recognized. Losses, if any, are recorded in full in the period they become known. Historically, the Company&#8217;s estimates of total costs and costs to complete have approximated actual costs incurred to complete the project.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the over time method, billings may not correlate directly to the revenue recognized. Based upon the terms of the specific contract, billings may be in excess of the revenue recognized, in which case the amounts are included in customer prepayments as a liability on the Condensed Consolidated Balance Sheets. Likewise, revenue recognized may exceed customer billings in which case the amounts are reported in trade receivables. Unbilled revenues are expected to be billed and collected within one year. </font></div></div>
CY2018Q1 us-gaap Revenue Recognition Sales Of Goods
RevenueRecognitionSalesOfGoods
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Revenue Recognition</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company generates revenues through the sale of products, the sale of services and the leasing of installation tools. The Company normally negotiates contracts for products, including those accounted for under the over time method, rental tools and services separately. Modifications to the scope and price of sales contracts may occur in the form of variations and change orders. For all product sales, it is the customer&#8217;s decision as to the timing of the product installation as well as whether Dril-Quip running tools will be purchased or rented. Furthermore, the customer is under no obligation to utilize the Company&#8217;s technical advisory assistance services. The customer may instead choose to use a third party or its own personnel.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-align:left;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Product and Service Revenues</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-align:left;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Product and service revenues are recognized as the Company satisfies the performance obligation by transferring control of the promised good or service to the customer. Revenues are measured based on consideration specified in a contract with a customer and exclude sales incentives and amounts collected on behalf of third parties. In addition, some customers may impose contractually negotiated penalties for late delivery that are excluded from the transaction price. </font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:36px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Management has elected to utilize certain practical expedients allowed under Accounting Standards Codification 606, Revenue from Contracts with Customers (ASC 606). Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the entity from a customer are excluded from the measurement of the transaction price. Shipping and handling activities that are performed after a customer obtains control of the good are accounted for as activities to fulfill the promise to transfer the good and thus are excluded from the transaction price. </font></div><div style="line-height:120%;padding-top:8px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Product revenues</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company recognizes product revenues from </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> methods:</font></div><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">product revenues are recognized over time as control is transferred to the customer; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">product revenues from the sale of products that do not qualify for the over time method are recognized as point in time.</font></div></td></tr></table></div>
CY2018Q1 us-gaap Revenue Recognition Sales Of Services
RevenueRecognitionSalesOfServices
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Service revenues</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company recognizes service revenues from </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> sources:</font></div><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">technical advisory assistance; and</font></div></td></tr></table><table cellpadding="0" cellspacing="0" style="padding-top:8px;padding-bottom:0px;font-family:Times New Roman; font-size:10pt;"><tr><td style="width:72px;" rowspan="1" colspan="1"></td><td rowspan="1" colspan="1"></td></tr><tr><td style="vertical-align:top" rowspan="1" colspan="1"><div style="line-height:120%;font-size:10pt;padding-left:48px;"><font style="font-family:inherit;font-size:10pt;">&#8226;</font></div></td><td style="vertical-align:top;" rowspan="1" colspan="1"><div style="line-height:120%;text-align:left;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">rework and reconditioning of customer-owned Dril-Quip products.</font></div></td></tr></table><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company does not install products for its customers, but it does provide technical advisory assistance.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company normally negotiates contracts for products, including those accounted for under the over time method, and services separately. For all product sales, it is the customer&#8217;s decision as to the timing of the product installation as well as whether Dril-Quip running tools will be purchased or rented. Furthermore, the customer is under no obligation to utilize the Company&#8217;s technical advisory assistance services. The customer may use a third party or their own personnel. The contracts for these services are typically considered day-to-day.</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;"></font></div></div>
CY2018Q1 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:16px;text-indent:18px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;">Use of Estimates</font></div><div style="line-height:120%;padding-bottom:0px;padding-top:8px;text-indent:32px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Some of the Company&#8217;s more significant estimates are those affected by critical accounting policies for revenue recognition, inventories and contingent liabilities.</font></div></div>

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